TMI Blog1990 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruct 60 apartments thereon together with servants quarters, garages, swimming pool and other amenities according to the plans, mainly for residential purposes and that, on the expiry of the lease period, the petitioner would hand over vacant possession of the said plot of land along with the structures thereon to the owners without claiming any compensation whatsoever. A formal lease agreement was executed on August 4, 1953, and the rent payable from April 1, 1954, was Rs. 4,000 per month. By an agreement dated December 18, 1968, the owners agreed to sell to the petitioner their reversionary rights in the property for a consideration of Rs. 20,00,000. The deed of conveyance was executed on March 10, 1971, and was lodged for registration on the same day. However, it was actually registered on January 29, 1977. Notice dated September 19, 1977, under section 269D(1) of the Act was served on the petitioner on July 4, 1978. The notice was published in the Official Gazette on October 8, 1977. Before the issue of notice, the competent authority, it appears, heard Shri S. P. Mehta, counsel for the petitioner, and prepared a note in respect of initiation of acquisition proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e owner's income or assets. In this context, learned counsel relied on the Gujarat High Court decision in the case of CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134 and the Calcutta High Court decision in Subhkaran Chowdhury v. IAC of I. T. [1979] 118 ITR 777, for the proposition that the presumption raised under section 269C(2) is not available for the purpose of initiating proceedings under that section. The presumption may apply only after the proceedings are otherwise validly initiated. Counsel further pointed out that, after the notice under section 269D(1) was published and an individual notice was served on the petitioner, the petitioner had submitted a detailed explanation when the case was heard by the competent authority. No further action was, however, taken for more than eight years. It was, thus, a case of dropping or abandoning of the proceedings. The proceedings re-started by the issue of second notice on December 24, 1985, under section 269F(1) were barred by limitation. Besides such an action on the part of the departmental authorities is arbitrary and unreasonable and violative of article 14 of the Constitution. The respondents having not cared to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) facilitating the concealment of any income or any moneys or other assets which have not been or which ought to be disclosed by the transferee for the purposes of the Indian Income-tax Act, 1922 (11 of 1922), or this Act or the Wealth-tax Act, 1957 (27 of 1957), the competent authority may, subject to the provisions of this Chapter, initiate proceedings for the acquisition of such property under this Chapter: Provided that before initiating such proceedings, the competent authority shall record his reasons for doing so : Provided further that no such proceedings shall be initiated unless the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more than fifteen per cent. of such apparent consideration. (2) In any proceedings under this Chapter in respect of any immovable property, (a) where the fair market value of such property exceeds the apparent consideration therefor by more than twenty-five per cent. of such apparent consideration, it shall be conclusive proof that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rental income and not otherwise. In this connection, it is necessary to bear in mind the fact that the owners had leased out to the petitioner only a plot of land and that all constructions thereon were made by the petitioner. Thus, the first question is whether the plot of land leased out to the petitioner was or could be a case of letting out of "premises" under the Bombay Rent Act. However, this question is settled, as rightly pointed out by Shri Chinoi, by the Supreme Court decision in the case of Mrs. Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal, AIR 1966 SC 1939. The contention that where mere plot of land was leased out for construction of a building for residence, it was leased out for construction of a building rather than for residence in that case, was rejected. In paragraph 14 (at page 1942), the Supreme Court held. "Turning now to the facts of the present case, we find that in each of these cases the lease was taken with a view to construct buildings thereon for residential, business, industrial or office purposes. The premises let are, therefore, 'premises' to which, under section 6(1) of the Rent Act, the provisions of Part II of the Act, apply." Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. Under section 269C of the Act. The facts in the present case are much worse for the Department for more than one reason. In the first place, the valuation report the sole basis for initiation of proceedings herein was withdrawn by the Department in the case of the owners themselves. The owners had withdrawn their petition before the Gujarat High Court for that reason. In the second place, the valuer who estimated the fair market value of the suit property in the case of the owners was aware of the fact that the suit property was a tenanted property. But he wrongly assumed that, on the expiry of the period of lease, the owners were entitled to vacant possession and the petitioner was bound to hand over vacant possession of the land and building to the owners. It is because of this fallacy that he valued the reversionary interest on the land and building method and merely reduced the value by about Rs. 3,00,000 which he thought the owners might have to spend on litigation to get the suit property vacated. In view of the legal position indicated above, the owners could not evict the petitioner, its right as tenant being protected under section 12(1) of the Bombay Rent Act. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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